The reorganization of a legal entity is the process of its transformation into one or more enterprises.
The reorganization of a legal entity can be expressed in the forms of accession, separation, merger, transformation or separation.
Consider the types of reorganization of a legal entity:
- Merge.
With this process of transformation, the organization completely ceases to exist and transfers its own rights and obligations to the created legal entity. This is due to the need to reduce managerial expenses, concentrate (consolidate) capital, save on increasing production, increase competitiveness, etc. When merging at a general meeting, the founders of organizations make a decision on reorganization. After that, a deed of transfer is prepared and then a reorganization agreement is signed. Then the charter of the organization is created and the authorized capital is determined.
- Joining.
The organization (organization) that joins transfers its rights and obligations to another, existing enterprise and ceases to function as a subject of law. Moreover, this person accepts the rights and obligations that the affiliated organization has. The decision on the reorganization of the enterprise , the procedure and conditions for joining, is taken at the general meeting of the founders and reflected in the approved agreement, and amendments are made to the constituent documents of the enterprise.
- Selection.
One or several organizations are created to which a certain part of the rights is transferred, as well as the obligations of the company that is being reorganized, without terminating the activity of the latter. Rights and obligations are determined in the separation balance sheet.
- Separation.
A legal entity ceases activities by transferring rights and obligations to newly created organizations. Separation and separation may be carried out by force by decision of the court and other authorized bodies.
- Conversion
With this form, there is a replacement of the legal form of the company. So commercial organizations can be transformed into other commercial and non-commercial legal entities, and vice versa, non-commercial into commercial.
Reorganization of a legal entity involves several stages:
1) At a general meeting of participants, a decision is made to reorganize the enterprise,
2) A deed of transfer, a separation balance sheet, an agreement on accession, division, merger or spin-off, etc., are drawn up depending on the form,
3) Notified by state authorities and creditors,
4) Published information about the reorganization in the media,
5) The registration authority is notified of the completion of the reorganization procedures.
When reorganizing an enterprise, it is necessary to carry out a complete inventory of property, coordinate settlements with tax authorities, extra-budgetary funds, and pay off all existing debts, including wages.
A reorganization of a legal entity is executed by a deed of transfer (balance) upon merger, merger, transformation, or - when separation and separation - separation balance sheet. They should contain provisions on succession, on the rights and obligations of the reorganized organization. After state registration, the enterprise is considered reorganized.
By a separate subdivision of an organization is meant a business unit that is geographically separate from it, in the location of which stationary (that is, for a period of more than a month) workplaces are specially equipped.
Registration of a separate division of a legal entity is carried out at a different address than the organization itself. A separate unit may have its own balance sheet and a current account.